Torsten Reil gave a TED Talk in 2003 called Simulating Humans, describing his research on animating human characters in 3D. Reil discusses how traditional video game animation is static and repetitive: animators create each character animation, and the character goes through the same motions every time -- every time the character falls down it's exactly the same animation of falling down. As a result, human characters in games have looked pretty unrealistic, and movie animation has taken a long time to create, as each motion has to be created by hand.
So Reil designed artificial intelligence to simulate a human body's actual biological behaviors -- building a nervous system with muscles and bones -- which can simulate typical human actions like walking, falling down, avoiding obstacles, and so on. Although the technology is now five years old, it's just finding its way into computer games like Grand Theft Auto 4.
Reil's talk is particularly fun because of all the failed prototypes he went through -- watching his animated "walking machines" fall down is pretty great. Have a look: